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THE EFFECT OF CYBER-ATTACKS ON STOCK RETURNS
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Marina Brogi 
, Maria Cristina Arcuri , Gino Gandolfi
Abstract
A widely debated issue in recent years is cybercrime. Breaches in the security of accessibility, integrity and confidentiality of information involve potentially high explicit and implicit costs for firms. This paper investigates the impact of information security breaches on stock returns. Using event-study methodology, the study provides empirical evidence on the effect of announcements of cyber-attacks on the market value of firms from 1995 to 2015. Results show that substantial negative market returns occur following announcements of cyber-attacks. Financial entities often suffer greater negative effects than other companies and non-confidential cyber-attacks are the most dangerous, especially for the financial sector. Overall findings seem to show a link between cybercrime and insider trading.
Keywords: Cyber Risk, Cyber-Attack, Information Security, Stock Market
Received: 30.11.2017
Accepted: 11.01.2018
JEL Classification: G10, G15, G20
How to cite this paper: Arcuri, M. C., Brogi, M., & Gandolfi, G. (2018). The effect of cyber-attacks on stock returns. Corporate Ownership & Control, 15(2), 70-83. https://doi.org/10.22495/cocv15i2art6
